Chapter III of Central Goods and Services Tax Act, 2017 & Integrated Goods and Services Tax Act, 2017 contains the provision of levy and collection of GST. The expression “Supply” is defined under section 7(1) of Central Goods and Services Tax Act, 2017. There is no such proposition in the existing laws as the concept of supply is unique to our tax system and considered as a ‘taxable event’ for the first time in indirect tax regime. Read My Full Article on Concept & Nature of Supply Under GST.

1. Concept & Nature of Supply
-GST One Nation One Tax

2. • Introduction
• Scope of Supply including Schedule I
• Composite Supply
• Mixed Supply
• Nature of Supply - Intra State & Inter State
CONTENTS
Concept & Nature of Supply

3. The expression “Supply” is defined under section 7(1) of Central Goods
and Services Tax Act, 2017.
CGST/SGST/UTGST/IGST shall be levied on all supplies of goods &
services or both except the supply of alcoholic liquor for human
consumption.
Chapter III of Central Goods and Services Tax Act, 2017 & Integrated
Goods and Services Tax Act, 2017 contains the provision of levy and
collection of GST.

4.  Supply includes all forms of supply of goods/ services
such as:-
 sale
 transfer
 barter
 exchange
 licence
 rental
 lease
 disposal
for consideration
in course or furtherance of business.
Section 7

5.  Importation of service for consideration whether or
not in course or furtherance of business.
 Activities specified in Schedule I without
consideration.
 Activities specified in Schedule II.
 Activities specified in Schedule III not to be treated
as supply of goods or services.
Section 7

6.  Schedule I- Activities to be treated as supply even if
made without consideration
 Schedule II- Specifies the activities which shall be
treated as supply of goods & supply of services. One
may refer Schedule II with reference to Section 7 to
classify whether the transaction involves supply of
goods or supply of services. (Not Covered)
 Schedule III- Specifies the activities or transactions
which shall be treated neither as supply of goods nor a
supply of services. (I.E. Negative list under GST law).
(Not Covered)
Section 7

7. Permanent transfer/disposal of business assets
where ITC is availed on such assets.
Supply of goods/services between related
persons, in the course or furtherance of business.
Supply of goods/services between distinct
persons.
Provided gifts not exceeding Rs 50,000 in value in
a F.Y. by an employer to an employee shall not be
treated as supply.
Schedule I

8. Supply of goods by principal to his agent.
Supply of goods by agent to principal.
Importation of service by a taxable person
from:-
 a related person,
 or from any of his office, other
establishments outside India
in course or furtherance of business.
Schedule I

9. Section 2(30)
Meaning Taxability
a supply made by a taxable person
to a recipient consisting of two or
more taxable supplies of goods or
services or both or any combination
thereof, which are naturally
bundled and supplied in
conjunction with each other in
ordinary course of business, one of
which is a principal supply.
Shall be treated as supply
of such principal supply
(Sec – 8).

10. • where goods are packed, and transported with
insurance, the supply of goods, packing materials,
transport and insurance is a composite supply and
supply of goods is the principal supply.
• This implies that the supply will be taxed wholly as
supply of goods.
Example
Composite Supply

11. Section 2(74)
Meaning Taxability
two or more individual
supplies of goods or services,
or any combination thereof,
made in conjunction with each
other by a taxable person for a
single price where such supply
does not constitute a
composite supply.
Shall be treated as
supply of that
particular supply
which attracts the
highest rate of tax
(Sec – 8).

12. • A tooth paste (say for instance it is liable to GST at 12%)
is bundled along with a tooth brush (say for instance it
is liable to GST at 18%) and is sold as a single unit for a
single price, it would be reckoned as a mixed supply.
• This would therefore be liable to GST at 18% (higher of
12% or 18% applicable to each of the goods therein).
Example
Mixed Supply

13. Inter State Supply
IGST
Intra State Supply
CGST & SGST/UTGST

14.  When location of supplier & place of supply are in
 Two different states
 Two different union territories
 A state & a union territory
 Import of goods/ services into territory of India
 Supply of goods/ services where supplier is located in
India & place of supply is outside India
 Supply of goods/ services to/ by a SEZ developer or SEZ
unit
Section 7 of
IGST

15.  When location of supplier & place of supply are in
 Same states or
 Same union territories
Not to be treated as Intra-State supply:-
 Goods imported into territory of India till they cross
customs frontiers of India
Section 8 of
IGST

16.  There is no such proposition in the existing
laws as the concept of supply is unique to
our tax system and considered as a ‘taxable
event’ for the first time in indirect tax
regime.